Qatar insurance market set for further growth: Moody’s

The Qatar insurance market is primed for double-digit growth, despite the fact that the price of oil continues to be depressed, according to a new report by rating agency Moody’s.

Moody’s points out that the market is the third largest in the Gulf Cooperation Council (GCC) region and is also one of the fastest growing, with compound annual growth rate of 21 percent over the past ten years.

The rating agency attributed this rapid growth to a combination of factors, which included the focus of the Qatari Government on infrastructure growth, which includes the various building projects required for Qatar to host the 2022 FIFA World Cup, and rapid population growth, which Moody’s points out has doubled since 2006.

A third factor identified by Moody’s is the advent of third party motor insurance and health insurance becoming compulsory, which have both spurred growth in the region.

However, despite this growth there still remains room for improvement, as Moody’s highlights the fact that Qatar has “one of the lowest insurance penetration rates in the region at 1 percent of GDP, a rate that is significantly below those of most advanced economies”.

The Moody’s reports points out how competitive the Qatari insurance market is at present, with 14 insurers operating in Qatar at the moment and 17 re/insurers operating in the offshore-domiciled Qatar Financial Centre.

Looking ahead Moody’s said that it expects this strong competition to ease off a little over the next few years, due to the opportunities for growth in the market due to the ongoing infrastructure projects for the World Cup.

Moody’s estimates that the Qatar insurance market grew by 25 percent in 2015, adding that it expects this level of growth to continue for the next few years.